Well, Barack Obama, the king of flip flops, has done it again. Just as he’s already changed his position on every other major issue, Obama has now flip flopped on taxes, and taken on a more moderate tone.
This is a pretty big change for Obamanomics. Economic advisers Austan Goolsbee and Jason Furman, in today’s Wall Street Journal, now say that Barack Obama’s tax plan will do the following:
1) It will increase capital gains and dividend tax rates, to 20 percent, only for families making over $250,000. Before, Obama was hinting at rates as high as 28 percent for everyone.
2) On the issue of the Social Security income cap, he’s now considering a plan that would make folks earning over $250,000 pay in the range of 2 to 4 percentage points more in total (combined employer and employee) payroll taxes. Previously, there were hints at increases of from 6 percent to 12 percentage points.
Both of these flip flops are, of course, a move in the right (no pun intended) direction. It would be far preferable, however, if Obama was not in favor of raising either the capital gains tax or the Social Security tax, since both would have negative effects that would likely outstrip any potential benefit. Raising the capital gains tax has already been proven to not bring in more tax revenue, as it leads to people simply not taking profits on investments so they can avoid paying the higher taxes.
The result is that raising capital gains taxes actually results in lower government tax revenues, while lowering them results in higher tax revenue. So if Obama’s goal is to increase tax revenues he should be talking about cutting the capital gains tax. All in all, whatever Obama proposes during the general election campaign doesn’t really matter much anyway, because it’s all a sham. It’s all just talk to make Obama seem like a moderate, when he’s really a far left candidate trying to pull the wool over the eyes of people that aren’t paying as much attention to Obama’s history as they should. The only reason what Obama says might matter is if you’re silly enough to believe him.
3 Responses
Obama said he doesn’t care that raising capital gains taxes would reduce governments total income. He said it was the right thing to do as it would make it more “fair”.
Posted on August 16th, 2008 at 1:30 am
There’s nothing fair about making somebody pay taxes on money they’ve already paid taxes on. Besides that, most Americans own stocks in one form or another. An increase in the capital gains tax rate is a tax increase on most Americans.
But, the whole idea of passing a tax increase that will actually lower the amount of tax revenue that comes in is incredibly stupid, especially if it’s being done strictly for the purpose of being punitive and redistributing wealth. It sends a very bad message, that trying to invest to take care of your retirement and your family’s well being will be punished, so don’t do it.
Posted on August 19th, 2008 at 2:46 am
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